NEW YORK
AppLovin (NASDAQ:APP) reported third-quarter results after the close Nov. 4, delivering a comprehensive beat across revenue, earnings and cash generation. Shares jumped 22.83 percent in after-hours trading to $333.80, capping a 10.69 percent regular-session gain.
Revenue hit $2.185 billion, up 55 percent year-over-year and ahead of the $2.07 billion consensus. EPS came in at $4.30 versus a $4.03 estimate. Net income rose 72 percent to $1.439 billion, while adjusted EBITDA grew 59 percent to $1.842 billion at an 84 percent margin.
CFO Matt Stumpf disclosed a critical metric: 65 percent of quarterly revenue converted to free cash flow, totaling $1.418 billion. That conversion rate—nearly two-thirds of top line into cash—is a forcing function for re-rating.
Stumpf also framed AppLovin's 55 percent growth against the largest digital advertising platforms, which posted growth in the 10 percent to mid-20 percent range. The gap is stark. CEO Adam Foroughi attributed the outperformance to a partial rollout of next-generation advertising models, which he suggested can drive 30 percent annual compounding long-term. He made clear this reflects his personal conviction, not official guidance, and declined to set a completion timetable.
The capital allocation story is equally important. AppLovin repurchased 4.1 million shares at an average of $341 in Q3—well above the after-hours price. Stumpf said management accelerated the pace because the stock price lagged intrinsic value. Since inception, the program has retired 104 million shares at an $90 average cost. The board raised authorization by $3.2 billion to $3.6 billion remaining.
AppLovin was the S&P 500's worst performer through this week, down 59.67 percent year-to-date entering earnings. If the after-hours level holds, the loss narrows to roughly 50.5 percent. Fair Isaac (NYSE:FICO), the second-worst performer down 58.53 percent, fell an additional 6.57 percent after hours.
The setup matters: this is a stock that fell 19.68 percent on Feb. 12 despite beating estimates, 19.66 percent on Aug. 6 after a sales miss, and 16.12 percent on Feb. 4 after a competitive announcement. Each drawdown created fresh bids for management buybacks. At $333.80, after-hours pricing implies the Street is beginning to price in both the 30 percent compounding thesis and the fact that management just committed $1.4B of shareholder capital at $341 per share—a $7-per-share cushion to current levels.
